OPEC Policy Ensures U.S. Shale Crash, Russian Tycoon Says
By Will Kennedy and Jillian Ward Nov 27, 2014 10:04 AM ET
At today’s prices of just over $70 a barrel, drilling is close to becoming unprofitable… Read More
OPEC policy on crude production will ensure a crash in the U.S. shale industry, a Russian oil tycoon said.
The Organization of Petroleum Exporting Countries kept output targets unchanged at a meeting in Vienna today even after this year’s slump in the oil price caused by surging supply from U.S shale fields.
American producers risk becoming victims of their own success. At today’s prices of just over $70 a barrel, drilling is close to becoming unprofitable for some explorers,Leonid Fedun, vice president and board member at OAO Lukoil (LKOD), said in an interview in London.
When it becomes unprofitable, the shale drilling stops (temporarily)
Opec would like the prices low (temporarily) in order to squash the shale (competition).
As long as the shale producers are the large oil companies with deep pockets, they may suspend production, but Opec screwed themselves by keeping oil prices unrealistically high for many years, so the consequence is they do not have the power they used to.
Lets not forget, these countries use their oil money to keep their citizens ‘in check’ and without it, they will have uprisings.
Not gonna happen….we’re back in the driver’s seat.
Wind and solar are doing just too, thank you.
Did he mention that it will also lead to the collapse of the Russian economy?
Putin will just start another war in the middle east to prop up oil prices.
Mark my words…